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SA must address regulatory and administrative problems to ensure mining industry thrives: Ramaphosa

10 May 2022 - 13:33
President Cyril Ramaphosa addresses the African Mining Indaba in Cape Town on May 10 2022.
President Cyril Ramaphosa addresses the African Mining Indaba in Cape Town on May 10 2022.
Image: Esa Alexander

President Cyril Ramaphosa has acknowledged the need to address regulatory and administrative problems to ensure the mining industry thrives.

Speaking during the Investing In African Mining Indaba held in Cape Town on Tuesday, he said SA needed to clear the backlog of mining and prospecting rights and mineral rights transfer applications. 

Ramaphosa said SA needed to put in place a modern and efficient cadastral system, and implement an effective exploration strategy.

“We understand very clearly the need to significantly improve the functioning of our railways and ports, and the importance of ensuring a secure and reliable supply of affordable electricity. These tasks are at the forefront of our economic reconstruction and recovery efforts.”

Due to high commodity prices, the mining industry is in a sweet spot at the moment that has seen it contribute significantly to the fiscus. 

However, due to infrastructure bottlenecks at state-owned Transnet Freight Rail, coal exports have been constrained. 

The Minerals Council SA estimated companies mining iron ore, coal and chrome had an opportunity loss of more than R30bn in 2021 because of inefficiencies in rail transport and the inability to efficiently and timeously ship bulk commodities overseas. 

Ramaphosa said the government’s plans to revitalise rail infrastructure and enable third parties access to the freight rail network were in full force.

“We have heard the calls from the industry for private operators to be allowed to operate the country’s dedicated coal, iron ore and manganese lines. We hope such proposals will be discussed at the Indaba, drawing on the experiences of other countries.”

Ramaphosa said work was under way to bolster security services and law enforcement agencies to tackle illegal mining, cable theft and general damage to infrastructure. 

“We value our ongoing collaboration with the Minerals Council SA to resolve these and other challenges facing the industry”.

The annual gathering of investors, government officials and mining companies started on Monday and was held in person after a two-year hiatus due to the Covid-19 pandemic. The last two indabas were held virtually.

Ramaphosa said since the last mining indaba, the government had made significant headway in driving a programme of policy reform for the network industries inextricably tied to mining and its operations.

He said an important area of progress is regulatory reform to facilitate new electricity generation by the mining and other sectors. 

“Regulations have been amended to allow companies to invest in new generation capacity of up to 100MW without needing to apply for a licence. We are working to further cut red tape for the registration of projects, to accelerate environmental approvals and to strengthen the capacity of Eskom and municipalities to link such projects to the grid.”

According to the Minerals Council SA, about 4,000MW or R65bn of electricity generation capacity investment is in the pipeline. 

The conference ends on Thursday.

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